The proposed amendments tailor requirements for public investment funds investing in cryptoassets to "better protect investors and reduce risk." Requirements include cryptoasset investment restrictions and custodial obligations.

The amendments are the second phase of a project to implement a Canadian regulatory framework for public investment funds holding cryptoassets. In the project’s third phase, the CSA will consult publicly on a broader framework.

Deadline for comments is 17 April 2024.

OSFI will issue draft guidelines on public disclosures by fall 2024. Final guidelines will be communicated by winter 2025, taking effect in Q4 2025.

Deadline for comment on the consultation is 31 January 2024.

“Today’s announcement of co‑ordinated international action on cryptoassets is a major step forward, marking another important milestone towards the widespread and co-ordinated approach to combat tax evasion through greater transparency and exchange of information,” Secretary-General Cormann said.

“We strongly welcome the extensive support being shown for quick action to make the international exchange of information collected under the OECD standard on cryptoasset reporting a reality. The international community can count on the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes to ensure that the tax transparency architecture remains both up-to-date and effective going forward.”

The Crypto-Asset Reporting Framework (CARF) is a key component of the International Standards for Automatic Exchange of Information in Tax Matters developed by the OECD under a G20 mandate. It provides for the automatic exchange of tax-relevant information on cryptoassets and comes against the backdrop of a rapid adoption of the use of cryptoassets for a wide range of investment and financial uses.

The notice sets out interim terms and conditions that would apply to cryptoasset trading platforms and the issuers of fiat-backed cryptoassets if they wish to continue allowing Canadian clients to purchase or deposit these assets.

The interim terms and conditions are intended to address investor protection concerns presented by value-referenced cryptoassets and include, among other things, the following provisions:

• The issuer of the value-referenced cryptoasset must maintain an appropriate reserve of assets with a qualified custodian, held for the benefit of the cryptoasset holder.
• The issuer of the value-referenced cryptoasset and cryptoasset trading platforms that offer them must make certain information related to governance, operations and reserve of assets publicly available.